Tag international trade

New polls showing that opposition candidate Marina Silva is likely to win Brazil’s upcoming presidential elections are leading growing numbers of analysts to predict that Latin America’s biggest country may soon shift toward more business-friendly policies, and rock the whole region’s political scene.

Silva, an environmentalist who was born in poverty, comes from a mixed-race family and is often referred to as “Brazil’s Obama,” is tied with left-of-center President Dilma Rousseff in the the polls for the first-round vote on Oct. 5, and would defeat Rousseff by 10 percentage points in a likely second-round vote scheduled for Oct. 26, according to the latest Datafolha poll.

If current voter preference trends continue and Silva wins, it would mark the end of a 12-year hold on power by the leftist Workers’ Party. During that period, Brazil has played a key role in supporting Venezuela and other leftist populist governments in the region.

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While the drama and sportsmanship of the World Cup has captured the world’s attention for several weeks, an international gathering of a different kind is set to begin in Fortaleza, Brazil, on July 15. After attending the final soccer match at the invitation of Brazilian President Dilma Rousseff, the leaders of Brazil, Russia, India, China, and South Africa, or the BRICS countries, will meet for their sixth summit.

The summit is likely to be more show than substance—but never underestimate the power of a good show. For a group that began as a mere Goldman Sachs acronym, the BRICS has slowly asserted itself as an economic entity. During this week’s summit, the group is likely to announce its own BRICS development bank with starting capital of at least $50 billion, and it is also cautiously wading into political territory.

What is the BRICS?

The BRICS began as BRICs—or Brazil, Russia, India, and China—an acronym coined by Goldman Sachs economist Jim O’Neill as shorthand for the developing economies with high projected growth. The countries took this constructed association seriously and began meeting formally in 2006. South Africa joined the club in 2010.

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As the Obama administration is preparing its “Pivot to the Pacific,” China is continuing to build its long-standing commercial alliance with Latin America and the Caribbean by charming the region with trade and investments.

Between 2000 and 2012, trade between China and Latin America grew by 2,550 percent from little over $10 billion to $255.5 billion. Trade between Brazil, the region’s giant and fellow BRICS member, and China, leaped from $6.5 billion in 2003 to $77 billion by the end of 2011 and $75 billion in 2012.

China became Brazil’s largest export destination in 2009 and in 2010 was Brazil’s most important source of imports and its main direct foreign investor. Chinese investments in Brazilian assets surpassed $20 billion in 2010 from a negligible accumulated sum of $292 million only one year before.

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The stark differences between Brazil’s and India’s agricultural productivity and their differing positions during trade negotiations in the past years are an often used argument of why South-South cooperation will always be an elusive dream. And indeed, India has often been accused of being a nay-sayer in the realm of agriculture, even by its fellow emerging powers.

It may then come as a surprise that agriculture and food security are among the first topics that emerged when the BRIC grouping began to discuss ways to cooperate. In fact, during the first BRIC Leaders Summit in 2009 in Yekaterinburg, a separate declaration on food security was issued, underlining the importance of the matter.

In the document, the BRICs professed to be “committed to opposing protectionism, establishing a just and reasonable international trade regime for agricultural products, and giving farmers from developing countries incentives to engage in agricultural production.” The 2-page document argues that “the developed and developing countries should address the food security issue according to the principle of common but differentiated responsibility”, a concept that would become a trademark of future BRICS declarations, particularly in the field climate change. Finally, the BRICs signaled their interest in cooperating by “sharing the best practices of operating successful public distribution programmes.”

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When the heart of the Amazon was among the richest places on Earth, local rubber barons flaunted their incredible wealth by building a spectacular opera house in Manaus with British steel, French glass and Italian marble.

At great expense, they shipped construction materials across the Atlantic and down the Rio Negro, then filled their new venue in the forest with the world’s leading musicians and conductors.

Even by the standards of the late 19th-century Belle Epoque, some considered this an extravagant folly. But those behind the scheme saw themselves as pushing back the boundaries of their civilisation.

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It was an unnerving sight for Vale’s investors. Dressed in a traditional Andean poncho, Brazil’s former president Luiz Inácio Lula da Silva was pictured in Argentina in May discussing the future of the miner’s suspended potash project.

“We are trying to make the venture viable and he seemed open to the idea,” Francisco Pérez, the governor of Argentina’s Mendoza province where the mine is based, said after their meeting.

The visit came less than a month after President Dilma Rousseff also flew to Argentina to discuss the matter, raising concerns that Vale, the world’s second-biggest miner by volumes, is facing growing political pressure to maintain the cash-draining project.